on fox news then election night yourself -- itself. we will be there as long a it takes. we have a great caterer. >> myths about disaster. >> it is not her fault to the economy. >> i should do this. >> this super pac is going crazy. >> myths about the election. >> neil: the auto industry zero argoankrupt? >> and that is our show tonight. john: tonight we exploded duty night about elections

and a natural disaster. i am told hurricane sandy is proof we need a powerful federal government, the fema to provide emergency management. the just makes sense. disaster across state lines who but the fed can help? the new york times declared a big star requires big government. very few politicians are skeptical. it is a relief to turn to ron paul. doctor, it is of myths that we need fema? >> i think so. it causes more harm than good. we handle plus a disasters 204 years before we had fema i have taken this position for a long time since the was first in office and i kept getting reelected

because people were tired of fema. locked into insurance and it is a bureaucracy. they just takeover. john: across the fed line they have to have rolled? >> no. we should have real insurance. it causes many of the problems because they say you have to have insurance. they will noo sell it. that tells you it is too dangerous. soap rich people are subsidized by the poor people they have a good time the houses are washed away. john: before the storm the president held a press conference that the red cross. >> we are here because the

red cross knows what it is doing with emergency response. john: what is the say? not fema? >> good politics but unfortunately from my experience the red cross was inhabited by fema. think of the difference between how the evacuation occurred in new york after 9/11, thousands of people with the opposite of katrina because fema had control. giving up on individuals helping neighbors, local government, that is a serious problem and why we are bankrupt.

all the money that will go out, there is no money in the paint and -- bank so they will just borrow and print and centralize the power to be in washington dc part of that is bureaucratic and insufficient. john: thank you for all you have done to wake people up. but i fear we will not have much convince -- succe convincing people we don't need fema. even though government fails part instinct leads us to assume washington has the best. they don't. they fail all the time. fema fails constantly. after hurricane hugo one senator called it bureaucratic jackasses to get the hell out of the way.

they said prove it but after hurricane andrew even in your times reported it is unclear who was in charge of the relief ever. mikulski said the response was seen as a disaster itself. they said they would fix it then came hurricane katrina and nobles to thousand people died. fema often got in the way. the extra hotel hired buses but fema took them and send them to the convention center. wal-mart offered a three trailer trucks filled with water and fema turned them away. they prevented the coast guard from delivered 1,000 dolls-- gallons of fuel even ordering 91,000 tons of rice but then shipped it to maine and arizona.

government bureaucracy is always incompetent for overtime everybody has to follow the rules theybecome incompetent. but my guest says i am wrong most people say we need fema they are not competent. they are a bureaucracy. >> i will not argue win fema has done well airfield but most people think when we're in a crisis floods, fires worried about their safety the government has an important role. people don't call wal-mart, they call 911. they expect back up. john: 911 is local government. >> but with hurricane sandy

and the local government is the first responder but when we have a major crisis governor crist christie called fema to say here is what we need. a move behind the local government. they are the responders of first resort. as you have seen this week some things warrant a big response. fema has stepped in this week in particular people who disagree say the president and fema are doing a great job. john: that is logical but steven horowitz said the private sector helps more

people. >> it does. look at wal-mart,loathsome improvement, marriott comment the aftermath of hurricane katrina major forces for good to get resources to people. john: fema but is that the most important part? >> we know fma was an absolute disaster. they did not get into new orleans almost one record 10 days. they gave people traders that toxic. and a block to the help coming. john: 295 wal-mart's hit by hurricane sandy there were open within 24 hours. impressive. >> wal-mart is the practice because they are reallygood at moving resources. they do that every day. they get resources into

place and get them up running again. >> i agree. i a read his steady but in a complete disaster and a complete failure of fema wal-mart step did all so home depot could deliver hard goods. but look at the comprehensive thins delivering water, to a paper is one particular aspect. there are security and safety aspects. look at the york with flooding of new jersey, new york, toxins are released in the water. that is not what qualified to do as wal-mart purpose of the house tell wal-mart where to go. >> they don't. wal-mart knew where there stores were damaged.

john: hat about the police? >> there is a difference between the two. disaster response is most the effective locally. no doubt those who he local knowledge are the best first responders. fema is a bureaucracy in washington doee not understand as well the needs from local community. >> your study was fascinating. you go back to hijack to say the market. wal-mart has a special type of knowledge to understand the market. you point* out to the were giving out the goods for free. so the market indicators thick use the extra edge so how does that economic theory applies? >> they were selling goods

and giving them for free. bandstand their employees live in those communities by helping them they help themselves. john: vs. agreed people who want to make a profit? >> it is "overblown" it is not a by gary choice where companies run their world or the government does. john: but th so anyway, i've been to a lot of places. you know, i've helped a lot of people save a lot of money.

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john: we have lights, electricit it is wonderful but to the south they don't. one-fourth of manhattan is still dark. people need flashlights i saw people selling them $30. here is.

right here. are you kidding? it must have raised its prices just because of the storm trying to gouge customers taking your vantage of a disaster. that is it viggo in 31 states. >> businesses cannot use hurricane sandy to make the unfair profit. if this happens called the attorney general's office. >> they warned businesses you better not gouge. >> anyone who violated the law will face significant penalty --enalties. but one economist says this is stupid. what they call gouging is a good thing. >> straight off of the onomics exam. price since a a valuable signal what is really scarce

what is hard to come by in disaster areas. we can engage with the economic triage with the $30 flashlight we think maybe we should pass in the those for who really need them. we create shortages people want more flashlights and people are willing to bring to the market. if the price rises it says bring flashlights toe york and new jersey. john: chris christie i thought he was free-market. he does not get this? >> apparently he does not. what is basic economics is to dance for the governor of new jersey. john: the store that sold us did not have power pumping

water from their basement. i could see what they want to to charge extra. if they could be fined $25,000. >> and important point* it is obvious they have other issues to do with by allowing the signal player and allowing prices to rise you send a signal people want flashlights. please divert your attention to make sure people have flashlights. john: one example from hurricane katrina. john shepperd said bought 19 generators drove 600 miles offered to sell them to times what he paid for people were eager to buy them but the police arrested

him, confiscated the generator and he was a jail for days. who wins? >> friends like that mississippi does not eed enemies. they take scarce resources from areas of relatively low need to areas of high need. with generators, and nobody got the after he was arrested. john: what about the pork? the poor are cut out. >> but merely passing the law to say you are not allowed to raise prices does not guarantee people get flashlights. price gouging lies prevents people from bringing more flashlights to the market. john: vs. bringing it down

to bring more. who raid four price gouging. i call it flexible prices and also how i personally rip you off and got to live in this bea

john: let's expand the debate of myths to the election. i am told the president will be chosen by a a small percentage of the undecided voters. who were they? the "huffington post" says they are idiots. if you do the google search labels say they are idiots. are they? i suspect they are if they still have not decided but my guess say it is myths

that they are down. we have bought welched from "reason" mmgazine and i read from the future of capitalism. you are undecided? >> i don't hold out as a genius but i went o harvard, i studied this for a living in adult like to make my decision. maybe i am a procrastinator. john: you have learned enough. >> there are flaws with both candidates. it is easier than voting from fell one who will save us from the troubled. john: there is research on this? >> the press kit out with the pool and it shows which is consistent with other organizations that they are

more likely to vote, more likely to read campaign information and we informed to but they are just undecided. john: but they are headlined as idiots the delight us b those who are invested with partisan politics as "the new york times" is those in who may not share their own proclivities may not be smart to seven what about that evil super pac? >> these gs riding $10 million checks and the super pac is going crazy. john: it is a dangerous weapon? >> these are people outside of politics trying to influence politics through money. what is wrong with that?

john: they have to much power. >> the people who have power part incumbent politicians running 95% for reelection. the only way to unseat them as people willing to spend money to run against them. some setbacks are bipartisan unseatining in elections but we would not have a primary if not for the super pac backing wickes santorum and newt gingrich making it more competitive. it is a way to have more competition spin my people could lose elections we would have california governor meg whitman if just more many one the election. john: they are pending 1 million but the campaign

spent by billion and americans spend 7 billion on potato chips. [laughter] >> i am told we need of federal warning system for disaster is like hurricane sandy. >> think of the most radical communication break through of our lifetime, not your show. [laughter] is the internet to bottom-up grass-roots and cellphones with a communication device that carries with you everywhere to access realtime aberration. you did not wait for barack obama you were refreshing twitter, listening to the radio, the weather channel, the dredge report. we access information we don't need the top down system to tell us what we learned an hour and a half ago. john: during the storm, all

the young people in my house got an emergency warning a big storm is about to hit. [laughter] and has never been used successfully. 1971 they played the wrong taper cross september 11th it was not activated. it was testers -- tested a member 2011 but some people heard lady gaga because of the mistake. government incompetence they spend hundreds of millions of dollars but nobody says to get rid of it. >> government creep emergency response almost always better at the local level. if you know the sound of new york disaster relief and you are better informe than a federal system.

john: they do. i will destroy things. and more erection myths. it is possible on tuesday that the president and vice president could be f

john: now more e election myths. obama's director of research says polls don't matter. i have been fooled. in 1980 everyone missed the reagan landslide. can accurately predict? once go to scott rassman said. polls are trashed all the time. >> of course, . they are trashed by the team that is losing. you cannot trust them or be have secretive permission.

we are shocked when a poll gets it wrong. in 2008 the entire industry missed hillary clinton winning in new hampshire because those don't happen. john: nawaz looking for poll mistakes. i was looking. >> 1948 if i was not around. john: how do you sample? >> the theory is called 1,000 and the numbers at random. but we don't do that began shafted place more erred calls in california and wyoming because of population. whites answer more than non-whites. women answer more than men. even then you have to wait the sample to make sure you

have the right mix. john: how do do that? >> it is from the statistics course we know we have 52 percent of women in this day we want to make sure the sample matches. john: criticism. you favor republicans. "time" magazine says you are conservative leaning and rasmussen polls are biased. >> there is always criticism. the pollsters incentive is always to get their right to. we have nothing to gain to game the system. john: if you have a reputation for getting it right. >> more people are mad at you. john: use speak to the first personthe answers the phone rather than random. >> there results academic theory back in the 1960's

where there were just a few pollsters like gallup would say of a bite to speak to the oldest male or the in this to female it was a good technique. now we have twitter, cable news, . john: what does that have to do with pulling? been a people don't communicate the way they used to. today is a question for cellphones. we don't use them we reach people who abandon a landline through on-line. my sons to not even a you can talk on the cellphone. they think it is for texting and twitter. five years there will be no more phone polls. john: you say the internet but that is a select group of they may not respond.

>> we don't know. we're back to the 1930's experimenting. we will do some polls, internal experiments using entirely different techniques to measure up against the eleion result to see how well we do. john: with 2000 bush you were way off. 5% higher. >> we missed we showed the president winning by more than he did. we went back and compare what you found to the results and learn from them. by 2004 we were within half a percentage point* per kaltbaum of be predicted 52/ 56 -- 46 but it was 53. john: i was looking for stuff to confront him and

those were the only examples . >> we make mistakes that is part of the process. one out a 20 both the off more than a margin of error that is what you look at a variety and look for the common ground. john: i would say toheck with you look at the people who bet to and the wisdom of crowds i hear those are even better. >> i trust the wisdom of the american people over there politician any day of the week. but that is driven by conventional wisdom is than the traded intrade at at the end is very very good. not to disparage it but it

is not a replacement for the polls. john: we will find out. >> sure. john: i assume the vice president and president will be from the same party. that may be a myth. >> 269/269, it is a long shot but the house picks the president which would more than likely be mitt romney the senate picks the vice president richard b. joe biden. jjhn: i was surprised rutherford hayes one by one vote to elect corley and bush/gourde it was five. it could happen. >> it is of close election and remember we have a fragile system the government today and struggling to earn the

legitimacy the way the election process is playing out is on helping. john: coming up i show how big government program allowed me to get you to pay for my beach house. what a scam.

john: now a disaster and election myth. the destruction produced by hurricane sandy men not be bad for the economy. >> sometimes they're not harmful because there is extract work with three construction and rehabilitation. >> one analyst says there could be long term benefits of reconstructions. john: we hear that before paul krugman claims 9/11 would be good for the economy. after the earthquake in haiti and to oppose the said this could be a boom economy for haiti. john: and appealing concept

for the simple-minded. i want to help so i have an idea. i will do this. i will create jobs by destroying thing this. what is wrong with this logic? sally? what is wrong? i will stimulate economic activity. >> we recognize the firebreak something without your permission i melt -- arrested. please don't. [laughter] when you replace things it looks like it might add to the economy but it could be used for more constructive reasons.

john: that is what eludes eludes -- elude paul krugman that the money has to come from somewhere going to something else. you both argue politicians have been around about to economic points. >> obama's says he will stimulate the economy with green jobs and mitt romney says defense spending this same principle but on different programs because the priorities are different part of the government gets involved and spend money bet it will create jobs. but when you take the money from other uses, from taxpayers comment and it redistributes john: it may be a good thing to pay for defense it

matters how would is spent? >> judge by the outcome. when someone says they create 1 million jobs that means his program is very expensive. they could have been doing something else it is suspect when they judge a program based on jobs created. john: moving on i was stck that if we need regulation you cannot start a bank in york raj. what is wrong? >> hewlett-packard's did start them major company and so did steve was the act. he is right you cannot start a bank because of regulation maybe we should question not

begrudge but the regulation. >> to take a more serious example wal-mart has difficulty starting a bank with the various regulations as they are facing. i would love to see the creativity wal-mart could bring to banking. imagines the bloom to consumers to seven government had to save gm. >> but if they didn't there be $25 billion in the whole. john: they're not paid back. >> again they took that money from taxpayers said the economy is worse. of industry may be ohio or detroit to save jobs but what about tennessee, indiana where other car manufacturers are

worse off? john: honda or toyota in america? it is not like the auto industry was. >> not at all. >> it is not clear gm or chrysler would not be saved. airlines go through bankruptcy as a fly there is a high probability they would still exist to be scaled down. >> we lose manufacturing jobs. >> politicians love that like a fetish making phoenix to drop by your foot to is more a valuable than services. the mayor can economy is service based. they are devoted to make things you cannot necessarily say. john: that is not real. but a dollar earned and

services is not less by a bold and manufacturing. it is not true. manufacturing is doing well. it has increased but the politicians don't get it. >> they don't say it. it is big in the swing states. states. politically.

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john: years ago i decided to build a beach house. my father said it is on the edge of the notion. are you nuts. go -- it is bluish. i did it anyway. my builder said i could not lose. if the ocean took my house uncle sam would pay to replace it. really? under national flood insurance. you have to pay for their advertisement. >> got what insurance? go online. john: flood stupid because it guaranteed it could not lose sight build a beach house. there it is that is a younger me.

i did have to pay insurance premiums but they were cheap why would uncle sam offer me cheap insurance with a house built on sand? james witt ran fema he said if it was not here people would build anyway and it would cost taxpayers more. bad is government logic. get the money up front by selling insurance. doesn't it may lie why private insurance that is reluctant? no. in their arrogance say private insurers want to much profit. floods are rare it will not lose money we will price it correctly. as usual they were wrong. government has fostered money.

billions of the red even before this week. compounding the evil it encourages us to build on the edges of potions. it is the biggest underwriter of property insurance. this week deal goes to movies stars in malibu, those who vacation near this summer homes of john kerry, the kennedy family the kennedy compound in hyannis. we're on the hook for more than $1 trillion. at least now they only will pay one-third of a million dollars and after floods four times it will not cover you any more. now the politicians are so generous they did not raise my premiums when short after i bought my house this happened. a storm surge took out my first floor.

you bought me a second one. i never invited you but why should taxpayers have to pay for my a first floor? should the taxpayers walk away? yes. -- let us take a risk with their own money that i would think more carefully right would build. a few years later another storm took out my whole house. everything. i was upset but financially i made out. you paid again for the whole house. i am not proud but i thought will i turn it down? if government is dumb enough to give me the money but i will not do it again. i am more responsible now. at least i will not repeat off on federal flood insurance provide to collect medicare that is a pyramid

scheme like social security and i will collect that. government guaranteesa savings accounts, money-market and my farm if i had one. then obamacare everywhere politicians are for guarantees that seem to make us safer but they destroy personal responsibility. they invite people to be reckless. when i confronted beach homeowners they yellow me they say we produce jobs for chefs and waiters. give me a break fattest as dumb as vice president biden saying this. >> we have to spend money from going bankrupt? yes. john: spend to keep from going bankrupt. that money comes from somewhere. by their logic we should go around